Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

Alliance & Leicester takes the bait

15 July 2008 / by Rebecca Sargent

The deal, worth £1.26billion, will offer existing Alliance & Leicester shareholders one Santander share for every three existing A&L shares at a price of 299p per share.

The announcement came amid rumours the UK's seventh largest lender was suffering at the hands of the credit crisis. Shares in A&L had fallen significantly on the back of the Bradford & Bingley fiasco. As both lenders deal with the rocky buy-to-let mortgage market, it was assumed by many that A&L would suffer the same fate as B&B have.

However, the takeover bid has quashed all rumours of imminent failure and strengthened the bank's reputation and position in the market. Santander already owns UK bank Abbey after a successful takeover four years ago.

As a joint venture it is thought that Abbey and A&L will become Britain's second largest mortgage lender after Halifax. However, the deal is not yet done and it is reported that A&L shareholders are still holding out for a rival takeover bid due to the cut share price offered by Santander.

It is also being reported that the takeover will have a negative impact for consumers, despite the positive effects its announcement has had on the banking sector. Kevin Mountford, head of current accounts at moneysupermarket.com, said:

"While city types may be breathing a sigh of relief at the creation of a new powerhouse in UK banking, the proposed deal may not be such good news for consumers.

"Abbey and Alliance & Leicester have similar structures, making a merger desirable, but they have both been key players in driving competition. A&L, in particular has long been regarded as the 'terrier' of the financial services industry." he said, adding:

"This news also increases the likelihood of other small innovators being swallowed up by big institutions, potentially damaging competition further."